Are Travel Credit Cards Worth It?
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Travel credit cards can be one of the best ways to lower the cost of travel, whether you're taking a trip to visit family in another state or boarding a plane for a luxurious vacation overseas. Regardless if you collect airline miles, hotel points or flexible issuer-specific currency, they all perform the same function of making your future trip more affordable.
However, many travel rewards credit cards come with annual fees, ranging from a sensible $95 to a staggering $695 per year. Not only that, but travel rewards take time to understand, and you might be left wondering "Are travel credit cards worth it?"
What is a travel credit card?
Travel credit cards come in many variations, but the main three categories include:
Co-branded airline credit cards.
Co-branded hotel credit cards.
Financial institution rewards cards.
Airline credit cards
Airline credit cards include options like the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®, the Delta SkyMiles® Gold American Express Card and the United℠ Explorer Card. These cards, and other airline-related options, earn miles in the respective airline’s loyalty program, which you can redeem for a flight when you have enough piled up. Terms apply.
» Learn more: Are airline credit cards worth it?
Hotel credit cards
Hotel credit cards, such as the IHG® Rewards Premier Credit Card, the Hilton Honors American Express Surpass® Card and the Marriott Bonvoy Boundless® Credit Card, perform a similar function and award you with hotel points redeemable for free nights. Terms apply.
General travel cards
You might also have heard about general travel rewards cards, such as The Platinum Card® from American Express, the Chase Sapphire Preferred® Card or the Capital One Venture X Rewards Credit Card. These cards earn flexible points that can be transferred to an array of travel partners, including airlines and hotels, redeemed for travel via a respective issuer's travel portal, or even used as cash back for statement credits. Terms apply.
No matter which travel rewards card you pick, learning how these rewards work will help you maximize their full potential.
» Learn more: The best travel credit cards right now
Are travel cards worth an annual fee?
Although a downside, many travel rewards cards come with annual membership fees. Some are reasonable and cost $95 to renew every year. Others charge as much as $695 per year, as The Platinum Card® from American Express does (it could still be worth it for the right traveler, though). Terms apply.
The upside of travel rewards cards is they often come with benefits, statement credits and travel protections, which can offset the annual fees.
For example, Chase Sapphire Reserve® comes with a $550 annual fee. To a casual traveler, the price tag can seem steep. However, the card comes with an easy-to-use annual $300 credit good toward travel purchases. It also comes with up to $60 in DoorDash statement credits (through December 2024), complimentary Priority Pass Select membership and a Global Entry/TSA PreCheck/NEXUS credit every four years, as well as trip delay insurance, baggage delay reimbursement, auto collision damage waiver on rental cars and roadside assistance.
These perks alone can offset the amount to hold the card every year, plus you get to earn points toward travel by making everyday purchases with the card. To help you get there faster, Chase Sapphire Reserve® 10x total points on hotel stays and car rentals and 5x total points on air travel purchased through Ultimate RewardsⓇ.
All you have to do is ensure that the value you get from holding a credit card outweighs your out-of-pocket cost to keep it every year.
The same logic applies to co-branded airline and hotel credit cards. Ask yourself if you would use a card’s benefits enough to justify paying its membership fee.
Do you check bags? If you fly with a carry-on only, a free checked bag benefit is useless to you.
Do you get automatic elite status with a hotel chain? Again, it’s worth nothing if your travels take you to non-chain hotels.
Be honest with yourself and keep your expectations realistic when considering a travel rewards card, its cost and the benefits you’d actually use.
Are travel credit cards worth your time?
Although travel rewards cards make it somewhat easy to earn rewards, more often than not, they don’t make it easy to redeem rewards for high value, leaving you to figure that part out on your own.
It’s true that learning how rewards programs work takes time and effort on your part and becoming a pro at maximizing your rewards won’t happen overnight. That’s not to say that it’s difficult to learn the basics.
Read articles on earning and redeeming travel rewards, practice running award searches and become familiar with how credit card points can be used. Here are some resources to get you started:
Soon, you’ll have an understanding of how to get the maximum value from your rewards and how to use them to fund your next vacation.
» Learn more: Worst travel credit card mistakes
If you’re wondering whether travel rewards cards are worth it
When used correctly, travel credit cards can be a gold mine for travelers wanting to reduce the cost of trips or travel more often. Make sure to use all the card’s benefits to offset the fees, avoid paying interest and learn how the rewards programs associated with your card work to get the most out of your travel rewards credit card.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card